Examination of Witnesses (Questions 200-219)
RT HON
LORD ROOKER
AND RT
HON KEITH
HILL MP
28 FEBRUARY 2005
Q200 Christine Russell: Therefore, have
we got the chicken before the egg? Should we not have looked at
the economic prosperity of the area before we looked at housing?
Lord Rooker: I think that was
done when Pathfinders were designated originally. They are quite
wide areas because one has to take account of the knock-on effect
on nearby housing markets. I have been surprised at the scope
of them geographically but the reason is because of making sure
that account is taken not to distort a nearby market by actions
in the Pathfinder. While most of their function is housing, that
is what they are, housing market renewal Pathfinders, they cannot
operate in isolation being ignorant about what is happening in
terms of job generation and making sure that the shops and schools
are there. In some cases populations run down and the calculations
say the schools should be closed but if they know they are going
to run the population up because of work from the RDA, the Pathfinder
and other efforts, we need to work in co-operation with our colleagues
in education to make sure that the schools are in the right place.
Work is going on in examples I have seen to make sure that it
is joined-up and we get those decisions right.
Q201 Christine Russell: Can I ask you
about CPOs because we have had evidence that one of the excuses,
perhaps, why some of the schemes have been slow to proceed is
because of the cumbersome CPO process. I am aware of the Planning
and Compulsory Purchase Bill, or Act as it is now, but what more
can we do on the CPO front to speed that up?
Lord Rooker: In a way, the answer
is in the Planning and Compulsory Purchase Act. The Government
proposed amendments to that Act, which were fully accepted in
both Houses, there were no disputes about it, to make Compulsory
Purchase easier. I do not think it is in force at the present
time but it cannot be far away. In some ways, that is an important
element to get an ease on CPOs.
Q202 Chairman: But it is not going to
be easy to start with, is it, because people have got to work
out how the new system works?
Lord Rooker: Yes, but they are
going to do that with the planning system anyway. There is more
consultation built into the planning system now than ever before.
No-one is going to argue about that, it is going to take time.
We need to get more buy-in to the decisions and we are more likely
to get more buy-in to the decisions, whether it is new build,
refurb or demolition, if there has been better and, indeed, adequate
and genuine consultation.
Keith Hill: There are two principles
in the new CPO arrangements which I think came into effect in
the autumn of last year. One is it makes it easier to identify
the owners of properties. I remember visiting the constituency
of Mr Cummings earlier last year and I have got in mind Easington
Colliery where there are properties which have been bought on
a speculative basis and it has been terribly difficult to identify
the ownership of those properties. The new CPO arrangements make
that process considerably easier and we have now built in additional
allowances which have the aim of incentivising owners to relinquish
their properties. On the whole, we do think that CPO reforms will
assist the process of land assembly in the Pathfinder areas which
is vital for regeneration purposes.
Q203 Christine Russell: Finally, can
I ask you how successful the Pathfinders have been in attracting
innovative, imaginative and creative developers, like Urban Splash
in Manchester? Have we been able to engage them in some of the
other areas to look at ways we can keep the Victorian terraced
dwellings but do schemes like the Salford one you mentioned earlier,
perhaps knocking two or three properties together?
Lord Rooker: It is invidious in
a way. Certainly Urban Splash are innovators and they operate
in many parts of the country, but they cannot operate everywhere.
Certainly the techniques employed are innovative and they are
always looking to make use of interesting buildings and to make
as much use of the existing buildings as possible. I have to say
it is not always possible because of the tax treatment of some
of the issues. I have visited areas—I think I said in answer
to the original question—where I have seen some really well
done, restored, refurbished communities as opposed to dwellings
themselves. Looking at isolated dwellings will not work, you have
got to listen to the people who live there. I will tell you about
the differences. Sometimes it relates to better security as well
built into the properties, which it was not to start with. People
have to think about these things with modern planning. As I say,
our presumption is certainly not demolition for demolition's sake,
far from it, but the idea that every property can be done up to
last another 100 years, I have to say flies in the face of the
evidence.
Q204 Chris Mole: You proudly indicated
that this was the first programme where increasing property values
are a key aim. Is there not a concern that by jumping straight
from deprivation to gentrification you could end up importing
some of the affordability problems from the South into the North
and Midlands?
Lord Rooker: If affordability
problems are getting a house up from £15,000 to £20,000
and someone pays £25,000 for it, it is not on the same scale
as the South. It can be a problem, I do not deny that. I was taken
aback or frustrated realising that the minute the Government indicated
it was going in anywhere, because obviously we are providing seed
corn capital in a way, the Pathfinder money is designed to lever
in sometimes two or three times, hopefully, other funds from other
agencies, and indeed, the private sector, people will know an
area is going to go up, the speculators would move in and that
in itself can force up the price, which in cases where we are
doing would CPO would make the issue a bit more expensive. That
is something I have to live with at the present time although
there is an indication that in one area the speculators have had
their fingers burnt, which is quite pleasing to note. The fact
is confidence in an area means people will invest, they will buy
properties they would not have bought previously, either for letting,
occupation or for businesses. That is a good thing but I have
to say that I do not think there is any danger of that at the
present time. Nobody ever uses the word "gentrification"
when I am in a Pathfinder, it is very much a Southern yuppie kind
of phrase, Chris.
Q205 Chris Mole: I will take that with
the sentiment with which I am sure it was made. So some of the
price uplift could be cyclical market swing, some of it could
be just stemming from the announcement that this is a Pathfinder
area. Where do you set the threshold and make judgments about
when it is appropriate for Pathfinders to exit from an area and
you move back to letting the market deal with it?
Lord Rooker: That is a very fair
point. In some ways, it is one of the toughest questions to ask
how you know what you have done has worked and you can walk away
from it and it is sustainable. It is almost the test of sustainability
that when the Government walks away it is okay, it does not collapse.
We have got some factors that we put in the five year plan, Homes
for All, where we look at issues relating to the prevalence
of empty properties tied in with some of the price factors of
properties in an area. We are a long way off that. I think Mr
Steinberg, who is the Chief Executive of Elevate East Lancashire—they
cover five local authorities, they have probably got the most
difficult task of all the Pathfinders—said they had identified
properties that were of less marketable value than 10 years ago.
To talk to people about falling property values on radio and TV
in the South, when you mention it they say properties do not go
down so you have to explain to them what has happened in pockets
in the North, that they have not got back to where they were ten
years ago. We are some way off that and it is very early days
to judge whether we will be a success. I am not saying we have
won, it has worked, I am saying that the early indicators are
that we have been able to make a difference in attitude to people's
lives and that is part of the confidence building. It will be
some years down the road before we know whether we have made a
real difference and we are probably at least a decade away in
any Pathfinder before we can say it is time for an exit strategy.
Q206 Chairman: When the Select Committee
originally reported, we were very keen on the idea of putting
mortgage guarantees or a floor into the market. In East Manchester
they have got mortgage guarantee schemes in place. Is that not
an indication that has got a long-term future almost secured because
there are mortgage guarantees in place?
Lord Rooker: All the Pathfinders
are different, doing things in different ways. They have got these
general factors but they are all different. In some areas they
might have low demand but they have not got abandonment, for example,
street by street of abandoned houses. That is not the case in
every Pathfinder. There have been issues to try and use some innovative
techniques with finance to give comfort as much as anything to
people in the Pathfinders because some of them are owner-occupiers
and because of what might happen within the Pathfinder we do not
want to convert them back to tenants because they cannot carry
the mortgage over from one property to another if they may be
out of work for a period. It does require some innovating but
I do not think the fact there is a mortgage guarantee means we
can walk away from it, the issue is too deep rooted for that.
It needs a strategic plan for the area. It covers two local authorities
and I think that is good because housing markets do not necessarily
go with local authority boundaries. They might go with the odd
postal code boundaries in some areas where people pay a lot more
for a post code but by and large I do not think that is the case
in the Pathfinders.
Q207 Mr Cummings: Several submissions
to the Committee refer to a skills gap in market renewal teams.
Can you tell the Committee why it has taken five years to establish
the Academy for Sustainable Communities? This was first identified
some five years ago.
Lord Rooker: No, it was not. I
thought it came out of Sir John Egan's report and I do not think
that was five years ago.
Q208 Mr Cummings: The Urban Task Force
Report in 1999.
Lord Rooker: If it went back that
far then I apologise for my previous answer. No, I cannot explain
why there is the delay. The Urban Task Force identified some of
the areas but John Egan's work identified some other areas in
terms of sustainable communities where there is a skills gap,
not necessarily in brickies and plasterers, let us say, but in
leadership, project management. These are major issues when you
have got an army of skilled workers and we have got some real
skills gaps in those areas which we are seeking to address by
the announcement of having the centre in Leeds, if I remember
rightly, which will be up and running fairly soon.
Q209 Mr Cummings: When will you expect
the Academy to have any impact?
Lord Rooker: I hope in a very
short time. It will certainly be up and running this year as we
are only in February at the present time, so it had better be.
It should not take that long. I hope for a very early impact.
The willingness is out there and people know there is Government
investment, they know we have got the growth programme and the
Pathfinder programme as well as others and it is not a North/South
issue, it is a national academy although it happens to be located
in Leeds, it is not a Northern issue.
Q210 Chairman: You are demonstrating
your enthusiasm for the scheme but is there any evidence that
any of the other Government departments are signed up to it?
Lord Rooker: I speak for the Government.
Q211 Chairman: Would you like to tell
me how enthusiastic the Department for Education and Skills are?
Lord Rooker: I go back to what
I said earlier. We have had discussions with other ministers and
other departments, whether it is the Home Office, the Health Department
or Education, about these issues relating to the Pathfinders in
the same way as we do with the growth areas. In fact, they are
covered very much by the same Whitehall operation simply because
we, for example the Government, are interfering, if you like,
with markets and we are doing that in the growth areas in some
ways by concentrating the growth. As opposed to what was said
by Sir Paul, we are not concreting over the South East. We will
use about 1.5% of the extra land if we get the whole of the growth
programme, so the urbanisation of this country will run to about
12.5% instead of 11%, the rest of it will be green. We are working
with them. It is health because where there has been abandonment,
for example, it is not just the houses that have been abandoned,
the shops have closed, the school population has gone down and
even the doctors lose their patients. We are in discussion.
Q212 Chairman: I understand that, but
let us just come back specifically to education and the funding.
The new funding mechanism they are talking about for schools is
going to be money for children on seats, is it not? The problem
with some of the renewal areas is that population is going to
come down before it can come back up and there is a danger that
schools cease to be viable in that coming down. How far are you
going to persuade your colleagues that there has to be transitional
funding so that those schools are there for when the communities
come back?
Lord Rooker: We have to. This
issue was raised with me by Pathfinders at the Conference in York
a week ago. It is not unique, there have been other areas of the
country where particularly where there has been large scale demolition
of properties under the Housing Defects Act. I know from my own
constituency that I lost 900 houses on one estate, Boot houses,
and in the middle of it was a primary school. We all knew that
the houses were going to come back but there would be this gap.
On the other hand, if a school goes really, really low you have
got a problem with the quality of education for the pupils in
there. The Education Department has got to take account of this
and I am confident that they will from the discussions that we
have had. It is very similar to what is happening in the growth
areas. I have been to areas where a school was built that would
not have started up under all of the calculations. You do not
start a primary school with 60 children—this was last September—but
by the time I got there a few weeks later they were up to 90 and
classes and forms were being doubled up, but they needed to get
the infrastructure there because they knew it was going to grow.
They are amenable to these distortions of the market that we are
doing, if you like.
Q213 Chairman: So you are confident that
in the case of Burnley its new PFI schools are going to be supportive
of the Pathfinders rather than disruptive of them?
Lord Rooker: I certainly hope
so. Burnley faces particular problems, all the Pathfinders do.
I do not know what the current state of the stock is but in Burnley
10% of the housing stock was empty and abandoned. Out of 40,000
there were 4,000 just empty, a huge number, street by street.
It was literally eerie to stand there. I have visited on more
than one occasion. If you are going to put a new community there
you want to start the school as early as possible. People are
more encouraged to go to an area if a school is open than if it
is promised. That means you need to take different—
Q214 Chairman: You have to have the funding
coming in before the pupils arrive.
Lord Rooker: You may have to do
that, yes. If you like, that is part of the cost of what we are
engaged in.
Q215 Christine Russell: Can I ask you
who should pay for the community support? Obviously when an area
is being regenerated it may involve demolition or refurbishment
or whatever, it will lead to some disruption and some upset. There
seem to be differences of opinion as to who should pay for that
community support. Should it be Pathfinder monies or direct support
from the local authorities in the area?
Lord Rooker: I am not sure because
I am not sure of the specifics. When you say "community support",
the Pathfinder essentially is housing market renewal housing and
others are expected to work with it in partnership.
Q216 Christine Russell: Some local authorities
within the Pathfinder areas are claiming that it is costing them
more money to employ Community Support Officers to help advise
and support communities where there is going to be redevelopment
and they are picking up the bill for that.
Lord Rooker: If it is a half decent
local authority interested in the strategic issue of housing for
its citizens it will embrace its role in community support in
the kind of example you give. If they are less than half decent
they will not and, therefore, they will score, as Mr Irwin said,
pretty weak or poor and we will have to get them up.
Q217 Mr Cummings: Do you not think that
some areas of market failure are effectively beyond the pale now,
Minister? Are some of the Pathfinders in danger of holding out
false hopes to people who reside in these areas?
Lord Rooker: No, I am not prepared
to agree that an area is so blighted that it has got no hope.
That is what the role of Pathfinders is. It is difficult and very
sensitive and you have to take some tough decisions in some areas
but we are not abandoning these communities. Some of them have
had double or triple whammies, they have lost large swathes of
industry in a very short period of time. I do not say that is
directly led but on top of that, because of the demographics,
if you like, they have had some really serious issues to deal
with. That does not mean to say that we, as a society, should
abandon them, we are trying to help them to rebuild their community.
Q218 Mr Cummings: Do you believe that
the Pathfinders in Hull and Stoke should concentrate on managing
decline in these towns?
Lord Rooker: I am not commenting
on Hull, I have never been there. The prospectus has not been
approved at the present time, although it is ready for approval
so there is good news that they will be joining the other eight
Pathfinders that are up and running. As for Stoke, Stoke has got
some particular problems. It lost its steel and coal industries
all during the period of a decade and the potteries have not been
doing too well in terms of the mass production side of it and,
of course, there is a very strange history in the way the housing
was provided for all the workers in one area. The managers, the
overseers and everybody else obviously cleared off, or were never
there in the first place, and they ended up with this incredibly
monotone structure of housing which we are trying to deal with
in a different economic situation. We are not abandoning the towns
that make up Stoke but it is true that there will have to be some
radical action there.
Q219 Mr Cummings: Do you not equate that
a managed decline in the area can certainly be of benefit to the
area in certain instances where the economic base has been so
eroded that there is not any possibility of it being revitalised?
Lord Rooker: I will give you an
example as to why I reject that as a proposition. When I was on
a visit quite a while ago to one of the Pathfinders, maybe 18
months ago, before they got their prospectus money, they said
to me, "We are not using the language of decline in our prospectus
or our attitude, we are using the language of growth. We are going
to grow this area. We are going to make people want to live here,
be proud to work here and be part of the community. We are not
going to use the language of decline, abandonment and all that
goes with it. It does mean we will have to take dwellings out
for various reasons but the language is going to be growth. We
are going to grow this community and make it sustainable and viable".
That is an attitude I have found when I have visited Pathfinders
that permeates the others as well. I accept that there has got
to be some radical surgery in some of these Pathfinders.
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